software , solution providers could dramatically improve customer support , talent utilization , and decision making . Within a mere few years , the economics of solutions delivery were completely transformed , according to Jim Lippie , general manager of Kaseya ’ s cloud computing business and the former CEO of Thrive Networks , a Boston-area MSP .
Lippie sold Thrive to Staples in 2012 . Looking back , he recalls that MSPs had two big business opportunities at the time : backing up customer resources to the cloud and converting on-premise Microsoft Exchange servers to the Microsoft Business Productivity Online Suite ( BPOS ), the forerunner to Microsoft Office 365 .
In the span of 18 months , beginning in 2010 , Thrive honed its pitch and pricing around these opportunities . Almost every day thereafter , it signed a new customer , netting it an additional $ 60,000 per month in recurring revenue .
Culture 2010 : From The Arab Spring To The Equifax Dumpster Fire
Remember Tunis 2011 ? It ’ s hard to believe that it ’ s been nearly a decade since the uprisings in North Africa and the Middle East . By the time the dust settled , Tunisia , Libya , Egypt , and Yemen had new governments . Egyptian strongman Hosni Mubarak had tanks , jet fighters , and thousands upon thousands of troops at his disposal , but he was no match for social media , which mobilized an entire nation against him in a matter of weeks .
While the decade started with most believing that digital technology was the answer to almost any problem , it didn ’ t end that way . From the rise of fake news to the growth in cybersecurity breaches , the perception of technology transformed dramatically between 2010 and 2020 . The decade ended with government regulators , business professionals , and consumers grappling with an entirely new set of challenges relating to privacy , regulation , social responsibility , election manipulation , and , perhaps most importantly , data security .
In “ The Decade Tech Lost Its Way ,” published in December 2019 , The New York Times summed up the 2010s this way : “ When the decade began , tech meant promise — cars that could drive themselves , social networks that could take down dictators . It connected us in ways we could barely imagine . But somewhere along the way , the flaws of technology became abundantly clear .”
2020 Technology : A Clearer Perspective
In the next decade , “ emerging ” innovations will mature . Their use will redefine automation in ways not previously anticipated . At the forefront of these game changers will be artificial intelligence ( AI ), big data , 5G networking , and the " internet of things " ( IoT ). In addition , watch for edge computing , nanotechnology , autonomous vehicles , and blockchain to revolutionize how business is done .
Used in any number of combinations , these innovations will have a massive impact on how MSP customers will leverage , consume , and manage digital capabilities . Given the uncertainty surrounding these technologies , expect your customers to depend on you for greater technological insights . To accommodate new demands , MSPs will have to hire new talent , enter new markets , and / or partner with new organizations .
“ In 2020 , the hype around emerging tech remains high , but transformational breakthroughs will be achieved as the decade rolls on ,” says Carolyn April , senior director of research and analysis at CompTIA .
Economics 2020 : New Money , New Revenue
Since 2010 , end customers have automated a significant portion of existing business processes . In the next decade , they will look to create new business value with digital automation .
Today , companies ranging from airlines to manufacturers to health care providers have taken baby steps toward digital transformation . Doing so has helped them develop new revenue streams , enter adjacent markets , and create new customer experiences . But this is only a fraction of what is to come . With some pluck and ingenuity , your MSP business could find itself at the heart of digital transformation .
This reality will have a profound impact on MSP finances and valuations .
Today , MSPs valuations , which are generally pegged to EBITDA , vary greatly . A $ 1 million MSP with a healthy $ 200,000 in EBITDA can realistically expect to command 5 – 6 times that in a sale . But a $ 20 million MSP with just half of that EBITDA as a percent of revenue can expect more thanks to its free cash flow , which can be used to retire debt more quickly .
Valuations will increase even more when MSPs develop repeatable digital transformation services .
Culture 2020 : Security Is Your Future
In May 2010 , Uber went live , ushering in a decade of disruption . The company ’ s business model and regulatory models were different . Instead of taxi commissions , Uber relied on customer ratings to monitor driver behavior .
While the results were mixed , the idea was utterly transformative . In time , countless other tech innovators followed in lodging , consumer services , communications , banking , and the like .
At the start of this new decade , however , government officials and industry regulators have said they will no longer sit idly by as industries get disrupted . What does this mean for technology providers ? It means they will have to provide new and more advanced services to their customers , especially those that work in regulated industries . Instead of a threat , MSPs may discover this is one of their biggest opportunities ever . Selling compliance as a service ( CaaS ) seemed like a dream a few years ago . Now it ’ s a reality . As the decade unfolds , so will other business opportunities , according to Robins from the Technology Marketing Toolkit .
“ A decade ago , I had my concerns whether this industry was going to be replaced by the likes of a Microsoft or Google that could theoretically sell you a laptop and all of the business services already baked in ,” says Robins .
But then , cybersecurity attacks began to swarm small businesses . When they did , they provided MSPs with new business opportunities .
Here ’ s to the 2020s and the solution providers who are starting it in-step with customer needs instead of lagging behind , like they did a decade ago .
AUTHOR BIO
T . C . Doyle is a writer , editor , and storyteller who has covered the technology industry for more than two decades . When he ’ s not in Silicon Valley or pursuing a story elsewhere around the globe , he can be found in Park City , Utah , where he resides with his wife and two sons .
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